Airline Entry Following U.S. Deregulation: The Definitive List Of Startup Passenger Airlines, 1979-2003

During the debate leading to airline deregulation, it was widely predicted that a number of new airlines would enter the scheduled passenger airline industry following the elimination of economic regulation of interstate operations by the Civil Aeronautics Board (CAB). These airlines would join the eleven trunk, eight local service, two Alaskan and two Hawaiian carriers that were authorized by the CAB to operate scheduled passenger service with jet aircraft at the time the Airline Deregulation Act of 1978[92 Stat. 1705] was adopted on October 24, 1978. Over 25 years have passed since 1978 and it is well known that a great deal of entry has occurred. However, there have been incorrect statements regarding the actual number of such airlines. For example, the Economist (July 10, 2004, p. 59) contained the following statement regarding “America’s airlines”: “Of the 34 newcomers created after deregulation, 32 soon went bust.” This paper will show that information is wrong by a factor of almost four; it does so by identifying and listing 129 “startup” airlines that inaugurated interstate scheduled passenger service with jet aircraft. Clearly, it is past time to publish a definitive list of startup airlines that entered the industry following the implementation of deregulation in late 1978, both to promote accurate reporting and to facilitate future research. The purpose of this paper is to provide such a list. Furthermore, it will identify which of those startup airlines emerged from existing airlines that the CAB had prohibited from providing interstate scheduled passenger service with large aircraft prior to 1978 – such as the former supplemental, air cargo, intrastate and commuter carriers – and which were newly organized after deregulation. Finally, it also identifies those startup scheduled passenger airlines that operated independently of all other carriers and those which were affiliated with larger carriers. One requirement for a new carrier to obtain an operating certificate under the much-reduced criteria of the Airline Deregulation Act has been for it to report traffic, financial and operating data on Form 41 or Form 298 schedules. Each carrier’s data were then compiled and published -- initially by the CAB to 1984, and then by the Department of Transportation’s Bureau of Transportation Statistics, Office of Airline Information. A few startup airlines may have never actually inaugurated operations, or have been so short-lived that they failed to file any reports before they disappeared. However, the great majority did file for varying periods. The carrier information in this paper is obtained from those filings. This means that not only did the carriers listed actually provide service, but also that consistent traffic and financial data are available to evaluate the performance of each carrier over all or most of its operating life.